Schools drive growth in public employees

Vermont's state and local governments (the latter includes towns and schools) employed more than 42,000 full-time equivalent employees in 2012, according to the U.S. Census Bureau.

A full-time equivalent worker counts two people working half-time as one full-time equivalent. That makes state and local government one of the largest employment sectors in Vermont.

Over the past 15 years Vermont's public employment has steadily grown as a share of the population. As the graph dramatically shows, that's very different from the nation as a whole, where public employment has been relatively flat over the same period.

Over the five-year period from 2007, just before the Great Recession began, through 2012, Vermont experienced almost no population growth. The state has only four-tenths of one percent more people now than in 2007.

Nationally, population growth has been 3.8 percent, nearly 10 times Vermont's growth rate. Yet Vermont's state and local government employment, relative to the state's population, has grown significantly over that period. That's much different from the experience of the fifty states combined, where public employment declined during the recession and continues to decline today.

In absolute numbers, between 2007 and 2012 Vermont's population grew by only 2,500 people but the number of full-time equivalent state and local government employees rose by 2,800. Vermont added more government employees than we added people to the state.

Vermont has a lot of government workers, but not because we have a large state government. Our total public employment is much larger than the average state because of high employment in our schools. For every 10,000 Vermonters, we have 340 kindergarten through 12th-grade public education employees, 60 percent more than the average state.

The recession led to a decrease in state and local government tax revenues and states responded by reducing their public workforce.

As the graph shows, that trend continues today. Vermont's budget was also hit by the recession — at least at the state level — and state government employment did not grow. But at the local level, where decisions about the level of staffing in Vermont schools are made, the recession had a completely opposite impact. Schools employed more people, despite a shrinking student population, and employment grew faster after the recession than it had before. That process, too, seems to be continuing today.

So our schools drive our very different government employment levels and trends. Why is Vermont so different from other states? It's not that we value education any more than people in Minnesota, Ohio or Kansas. But the unique way we fund education, and how we levy property taxes for education, gives voters an incentive to pass budgets that increase employment, and hence spending.

Art Woolf is associate professor of economics at UVM and editor of The Vermont Economy Newsletter.